Court To Hear Plainfield's Tax Fight With Grand Central

Plainfield Township supervisors and Grand Central Sanitation Inc. have taken their battle over a business privilege tax to Northampton County Court.

Both parties are seeking the court's decision on whether the township may levy a 5 percent tax on gross revenues generated by the firm's landfill.

Grand Central has not paid the tax since the beginning of November 1987. The firm's decision forced the supervisors to raise the 1988 real estate tax from 8.5 to 14 mills to offset the loss of approximately $700,000 in revenue from the landfill for the year.

The supervisors enacted an ordinance Jan. 17, 1985, levying a 3 percent tax on the landfill's gross receipts starting March 1, 1985, under Pennsylvania Act 511, the Local Tax Enabling Act. The township amended the ordinance Dec. 2, 1986, increasing the amount of the tax to 4 percent beginning Jan. 1, 1987, and to 5 percent effective April 1, 1987.

Attorney Leonard Zito, representing Grand Central, in correspondence to Nolan Perin of Grand Central Oct. 28, 1987, raised concerns that the tax "must be uniformly and equitably applicable to all facilities, . . . must not act to confiscate monies of the private entrepreneur by assessing a tax which is disproportionate to the disposal rates . . . (and) must be deposited and expended for the purpose of improving waste management systems or in some way related to the environmental risks connected with the business being taxed."

He advised Perin at that time to cease paying the tax until questions about the legality of the tax were resolved.

Township Solicitor John Molnar said the township believes it has the legal authority to levy the tax and to use the revenue for general purposes. In the township's petition to the court, Molnar said under Act 511 and the local ordinance, "every waste disposal business within Plainfield Township must file a monthly waste disposal business privilege tax return and pay to the tax collector the amount of the tax due."

In asking the court to uphold the ordinance, the township is also asking that Grand Central pay all back taxes, interest and penalties as well as legal fees.

Grand Central has asked the court to find the tax to be excessive and unconstitutional. Should the court declare the tax illegal, the landfill has asked for the return of about $800,000 in taxes paid since March 1985, plus interest.